Escend Technologies entry into a new market posed two significant risks. The first was the company’s risky entry into a market that had an intricate web of relationship amongst the industry players thus making the market complex. The second risk was the lack of a correct value proposition which the firm could pose to its potential customers. The company entered the industry with a clear planning approach or entry strategy. Entering the industry thus exposed Escend to many unknowns regarding customer needs, technology, and industry (Loch, DeMeyer, & Pich, 2006). The company had developed inappropriate milestones in its business plan. In an attempt to fit into the industry, Escend attempted to improvise its plan without explicit knowledge of the market functioning. As a result, its value proposition kept on shifting due to reactionary measure being adopted by its management. The firm did not consider market dynamics or its customer needs. Escend lost colossal sums of money in its first four years while attempting to stabilize.
However, appointment of Elaine Bailey in 2003 as the interim firm CEO heralded the beginning of change (Loch et al., 2006). Elaine managed to identify problems in the company and focused on capitalizing on the market opportunity. The CEO identified alternative angles of doing business that had potential success. Elaine oversaw two significant business changes that completely altered Escend’s strategy. Elaine adopted a new product design that would conform to the global platform (Loch et al., 2006). The electronic components market had become global hence creating a need to invest in the product changes. The CEO executed the strategy with a mindset that their competitors would also have to redesign their products (Loch et al., 2006). Escend would thus take the lead. Escend also invested in a distribution functionality that would increase visibility of the firm’s network. These strategies gave the firm an opportunity for growth. The company was thus able to get more money from investors.
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Comparison of Double-Loop Learning
Double-loop learning is a means of detecting errors. It also involves doing modifications to existing plans and policies with an intent of correcting mistakes. It alters the response of a company to errors. A firm can undertake two types of double-loop, which include experiential learning and improvisational learning. Experimental learning involves stretching from trial and error towards purposeful experimentation ( Loch, Solt & Bailey, 2008) . Improvisation learning entails learning in real time through variety of actions ( Loch et al., 2008) . When firms expand into new industries, such corporations contend with various risks, especially concerning operations. A change in business environment results in unavailability of sufficient funds due to increased operational expenses ( Loch, et al., 2008) . A company thus has experience, knowledge, and project-specific plans to overcome the problems. A company known as PCNet overcame its issues by implementing the improvisational aspect of double-loop learning (Loch et al., 2006). The double-loop learning method is advantageous in driving a new action. The basic plan for the company was risk management office that responded to the unknowns as they emerged.
Escend technologies managed its problems by initially adopting a planning approach, which constitutes experimentation aspect of double-looping. Escend uses the method to develop and implement its plans while it closely monitored and evaluated it. Any necessary modifications were undertaken on the plans. However, many unknowns arose thus placing pressure on the management. Escend thus attempted to improvise the plan by going round it. The improvisation led to confusion; further, the company underwent its original goal that was focused on making money from the market opportunity. Escend decided to focus on everything to make the plan work.
Three Lessons Learned
Any situation, whether good or bad, provide managers with a new experience that enables them to gain new knowledge. The information garnered from projects can be improvised and applied in future projects. There exists a few lessons that a project manager can learn from Escend Technologies and implement in future projects. The first lesson learned is that information can be vital if gained early. Costs during early stages of operation are often at the lowest. The stage provides an opportunity for managers to learn even if chances of success are minimal. Organizations should thus anticipate and take advantage of available early information to learn about the industry (Loch et al., 2006). Success of the project is dependent on what is done with the gained early information.
The second lesson learned is that project teams have to be organized in preparation for rapid experimentation. In cases where functions are specialized, rapid or sudden turnarounds can be difficult since one party must learn the purpose of another prior to successfully implementing the project (Loch et al., 2006). Misalignments can occur as a result of experiments entering a queue each moment a test is passed over to another person. The third lesson outlines that firms should always combine multiple technologies to assist in maximizing variation as well as opportunities for learning. It is best to learn changes in technology while the project is in action. During initial stages, learning occurs by analyzing customer questionnaires, pictures, or graphs.
References
Loch, C., DeMeyer, A., & Pich, M. (2006). Managing the unknown: A new approach to managing high uncertainty and risk in projects . Hoboken, N J: John Wiley & Sons, Inc.
Loch, C. H., Solt, M. E., & Bailey, E. M. (2008). Diagnosing Unforeseeable Uncertainty in a New Venture. Journal Of Product Innovation Management , 25(1), 28-46. doi:10.1111/j.1540-5885.2007.00281.x
